How to manage a rapidly growing online distribution network, maintain a high quality of product presentation and effectively monitor the changes taking place in e-commerce – explains Igor Gębarowski, Sales Director of Dibaq Polska.
Aleksandra Hołownia, Dealavo: Dibaq and Fitmin are brands known mostly by pet owners. Can you tell us more about your company’s activity?
Igor Gębarowski, Dibaq: Dibaq is a company that manufactures and distributes dog food and cat food. This means that we are an FMCG company, with fast and regular product turnover. Our industry is also quite unique. Pet food exceptionally likes e-commerce and e-commerce likes pet food.
A.H.: Why is that?
I.G.: Products from our industry are often large-size goods – packages that weigh a dozen kilos or more – and they are more convenient to order on the Internet. This way, the parcel is delivered directly to the customer’s home, and the large package of cat or dog food lasts for a longer time. This convenience, among other factors, is what makes e-commerce so popular – currently around 50% of our sales happen online. Another 50% of sales take place through the traditional channel – specialised pet shops all over Poland.
A.H.: In many sectors, it was the outbreak of the COVID pandemic that made shopping online more popular. Was it also similar in your case or was the trend present even before the pandemic?
I.G.: We have been observing the growing importance of e-commerce for several years now. We expected that the role of the online sales channel would increase, and we were prepared for it – thanks, among others, to such tools as Dealavo.
However, the pandemic has accelerated these processes. When we started our cooperation with Dealavo in 2019, the application showed around 100 retailers offering our products. Today, the number has reached almost 400. As we can see, there has been a rapid growth of our customer base.
A.H.: What changes did you observe during that time?
I.G.: The e-commerce market is not only growing but is also becoming more dispersed and diversified. There are many small sellers on the market, but there are also businesses that specialise in e-commerce.
The majority of our customers use more than one sales channel. Just because you are an owner of a chain of physical stores does not mean that you do not sell online. Searching for new sales channels has become more important also because of the pandemic – customers who previously owned physical shops, in shopping centres, for example, moved to the Internet.
A.H.: What changes can you monitor using the Dealavo tool?
I.G.: Dealavo allows us to continuously monitor the sellers who offer our products and the prices at which they sell them. We can also analyse how sensitive our market is to changes and how fast it responds to them.
Thanks to the reports we get, we can also see the differences between specific products and lines of products. We use such reports during our department meetings.
A.H.: Did the reports show you something you were not aware of? Did something surprise you?
I.G.: Yes, I observed a significant difference in the speed and intensity of response of our clients on Allegro in comparison with the clients selling our products directly in online shops. Interestingly, when we increased or decreased the price, shops selling on Allegro responded to the change much quicker. This means that the final customer could, for example, buy the product cheaper on the website of an online shop than on the marketplace because the price there did not yet increase. This can be clearly seen in the historical reports that we get from Dealavo.
We can also observe that the competition on Allegro is really strong. We have also noticed that the retailers are using new methods to compete with one another and promote their offers.
A.H.: What kinds of promotion do you have in mind?
I.G.: For example, discount codes or giveaways are growing increasingly popular with our customers. We can see that, instead of competing with lowest prices, they often decide to add value to the customer using giveaways, cross-selling or upselling. Sometimes, such offers may have errors if you publish them automatically – thanks to the Dealavo tool, we can easily identify such errors and inform our customers about them. For example, the product may be displayed in the wrong way, or there may be mistakes in descriptions or photos. Sometimes, the product is not visible in the customer’s account due to incorrect settings. In such situations, we help our customers to identify any problems as quickly as possible.
A.H.: So you use the tool as a form of quality control?
I.G.: Exactly. Dealavo helps us to support our clients – sometimes they have several accounts (to get bigger reach) and do not include our products on some of them by mistake. We can easily identify it in the monitoring tool and notify the retailer.
A.H.: Your products can be classified as premium class. Are you building this position also by using the price policy?
I.G.: Our products are indeed in the premium and super premium class. This does not mean, however, that they are exclusive, luxury goods – our products are widely available and sell quickly.
Regarding our price positioning – we are aware of our competitors’ prices, but we make our own decisions. Our prices result from the quality and unique ingredients – the pet food of the Purity brand, for example, contains such ingredients as shiitake mushrooms and high-quality herbs.
A.H.: Do you expect any changes or challenges in e-commerce in the nearest future?
I.G.: We should definitely observe the market to see the impact of Amazon entering Poland. I also noticed the appearance of new platforms, such as Erli, that aggressively try to acquire new customers.
A trend that is already present is that it is increasingly difficult for smaller sellers to enter the market, which is becoming more and more competitive. We see it ourselves in the Dealavo application that smaller sellers also try to offer our products, but it is difficult for them to reach the final customers, who rarely look for information on further pages, while the first pages are occupied by the biggest players.
When we see such small sellers in the application, however, we try to contact them. This will not always lead to direct cooperation – in some cases, such people only buy small amounts of Fitmin products to try to run a business on Allegro. Sometimes, however, it can be the beginning of a partnership.
A.H.: The popularity of e-commerce with smaller companies may be evidenced by the study titled „The new world of e-commerce”, which indicates that the online shop is only an additional source of income for 66% of the sellers.
I.G.: That is true, I can see that the market is very dispersed, and there are new shops established after the outbreak of the COVID pandemic as a secondary source of revenue. The dropshipping model has also become more popular.
Time will show if smaller players manage to survive on this increasingly competitive market.